The Hindu Business Line : Exide sales volume rise 25% in April-May

The lead-acid battery manufacturer, controlling 78 per cent market share in the OE (original equipment) segment, has used the surplus capacity created out of lower OE demand since April to meet the huge demand for inverter batteries during the summer months followed by pre-rains replacement demand for automotive batteries in parts of India, especially in Mumbai.

Both, inverter batteries and replacement sales in automotive batteries generate reasonably higher margins than OE sales.

While Exide officials declined to comment on the effect this has had on profitability, it is learnt that the "momentary drop" in OE requirement has allowed them to generate some additional margins.

According to sources, Exide has registered 25-30 per cent growth in volume sales during April-May 2007 compared to the corresponding period in 2006. Sales of automotive batteries have increased by 22 per cent in volume terms and 50 per cent in value during the whole of last fiscal.

"The sales volume of inverter batteries has gone up substantially compared to that in last fiscal in April 2007," a senior Exide official told Business Line.

In a lighter vein though, he said, the improvement in power supply situation in Maharashtra and north India during May could be putting a check on the soaring inverter sales. "Had the power situation not improved sales of inverter batteries could have increased further," he added.

Meanwhile, the company's initiative to grab a share of the replacement market for tractor batteries has started yielding results. Coverage has been expanded to 30,000 villages in 11 major States, and the company is expecting a major growth in this segment this year.

"Last year sales of tractor batteries in the replacement market grew by 27 per cent, and we are expecting this to improve substantially this year," the official said.

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